Barclays Bank boss Jes Staley QUITS ahead of report into his previous role as Jeffrey Epstein's private banker
Barclays boss Jes Staley has quit after the bank's board said it was 'disappointed' with the outcome of a report into his links to convicted sex offender Jeffrey Epstein.
The bank said it was made aware last Friday evening of the preliminary conclusions from the Financial Conduct Authority's investigation, but did not go into details.
The American banker intends to contest the findings. Barclays meanwhile pointed out that the probe makes no findings that he saw, or was aware of, any of Epstein's alleged crimes.
It is understood the early draft of the report suggests the father-of-two, who grew up near the US east coast city of Philadelphia, played down his role in Epstein's affairs while acting as his private banker in a previous job.
He had denied reports as recently as last month that he could leave by the end of 2021 - telling the Evening Standard that he would be staying for another two years.
The Barclays share price fell by around 3 per cent on the news in early trading this morning, although a weaker pound helped lift the exporter-heavy FTSE 100 index.
Barclays said last year that UK financial regulators were probing links between Mr Staley and Epstein, who killed himself while awaiting trial on sex trafficking offences.
Mr Staley has previously said his relationship with Epstein - who was also friends with Prince Andrew - ended in late 2015, and that he regretted his relationship with him.
The 64-year-old, who is married to interior designer Debbie, was replaced today by the bank's head of global markets CS Venkatakrishnan, known as 'Venkat'.
Barclays said Mr Staley was entitled to 12 months' notice and will therefore continue to receive his current fixed annual pay of £2.4million in cash and Barclays shares, a pension allowance of £120,000 and other benefits until October 31, 2022.
Jes Staley and his wife Debbie Staley are pictured together in New York in March 2017
Jes Staley (left) at Jeffrey Epstein's mansion in New York in 2011. Pictured (from left): Mr Staley; former Treasury Secretary Lawrence Summers; Epstein; Bill Gates, Microsoft's co-founder; and Boris Nikolic, who was the Bill and Melinda Gates Foundation's science adviser
Mr Staley was born in Boston in 1956. He is one of four children who moved frequently with their father, Paul, a plant manager for Procter & Gamble.
His father later became CEO of PQ Corporation, a chemicals business based outside Philadelphia, where Mr Staley grew up.
After graduating with a degree in economics from Bowdoin College in Maine in 1979, he joined banking giants JPMorgan on a training program in New York.
He later moved to Brazil to help set up its investment banking venture in South America, where he met his future wife Debbie - just days after arriving.
He returned to New York in 1989 and quickly shot up the ladder at JPMorgan. In 1990 he was asked by then-CEO Sandy Warner to manage the group's private banking division.
In 2001, he was promoted to CEO of JPMorgan Asset Management and ran the division until 2009.
After 34 years with JPMorgan, he left for BlueMountain Capital Management, now Assured Investment Management, in 2013, before joining Barclays in 2015.
He is also credited as a key supporter of the LGBT community within the US banking sector, having been inspired by the work of his younger brother Peter, who was diagnosed with AIDS-Related Complex (ARC) in 1985.
Peter founded Act Up, a New York–based AIDS activist group, and would go on to serve as a member of president Bill Clinton’s National Task Force on AIDS Drug Development.
Mr Staley meanwhile was recognised for his contributions in making JP Morgan an LGBT-friendly company, having been a key figure in the building up of JP Morgan Pride.
Though working in the UK as CEO of Barclays, Mr Staley is reported to maintain at least two residences in the US.
He is said to own a property in New York's famous Park Avenue - where even the cheapest of properties will set buyers back £1million and luxury apartments regularly sell for more than £15million.
The top penthouse at 432 Park Avenue - a 1,396-foot-tall residential sky scraper overlooking Central Park - was sold to Saudi retail magnate Fawaz Alhokair for £65million in 2016.
Mr Staley, who has two daughters, is also said to own a property in Southampton, US, which is part of the exclusive Long Island coastal area known as the Hamptons. Beach front property prices there can top £65million.
Mr Staley meanwhile is said to be a fan of the baseball team the Boston Red Sox, owing to his roots in the city, and a supporter of the US Democrat party.
According to reports in the Guardian, he has held fundraisers for the party at his plush New York apartment, said to be a short distance from the Guggenheim museum.
A keen sailor, Mr Staley also owns a hand-built 90ft yacht, Bequia, named after the Caribbean island where he spent his honeymoon with his wife - whose family were the founders of Brazilian data firm Aceco.
She and her brother Jorge Nitzan sold most of their stake to private equity giant KKR in 2014 – pocketing £124million and £62million respectively, according to the Wall Street Journal.
Aceco went on to suffer disastrously when the Brazilian economy nose-dived a year later. KKR launched a legal battle against Nitzan and fellow sellers in an effort to get its money back, claiming they were victims of a fraud.
There was no suggestion Mr Staley was involved in this but KKR was said to be angry, claiming the banker had vouched for Nitzan in a conversation with two of its co-investors. Nitzan, meanwhile, has called the accusations of fraud 'baseless', claiming that Aceco was instead damaged by the worst recession in the nation's history
In May 2017, Staley was backing his brother-in-law Jorge in the dispute. In turn, KKR stopped inviting Barclays to participate in its deal making.
Meanwhile, Mr Staley's relationship with Epstein has been under the microscope since revelations about the financier's sex trafficking came to light.
Mr Staley embarked on a 'professional relationship' with Epstein in 2000, when he became head of JPMorgan's private bank, of which Epstein was a client.
Mr Epstein had been charged with sex crimes and pleaded guilty in 2008 to solicitation of prostitution.
A report by the New York Times in 2019 revealed how compliance officers at JPMorgan Chase conducted a sweep of their wealthy clients in 2009.
According to the report, the compliance officers recommended that the bank cut its ties with Epstein because his accounts posed 'unacceptable legal and reputational risks'.
However he remained a JPMorgan client until 2013.
Mr Staley also admitted he maintained contact with Epstein, who died in a New York prison cell in 2019, for seven years after his 2008 conviction.
Staley said his last contact with Epstein was in fall 2015, when he and his wife sailed to Epstein's private island for lunch. That trip occurred shortly before he joined Barclays. He said he had no contact with Epstein once he joined the bank in December 2015.
Barclays say the Financial Conduct Authority's probe into Mr Staley's links to Epstein makes no findings that he saw, or was aware of, any of Epstein's alleged crimes.
Speaking in February last year, Mr Staley said: 'For sure, with hindsight with what we know now, I deeply regret having any relationship with Jeffrey.'
Mr Staley's successor, Mr Venkatakrishnan, had been global markets chief and bank co-president since October 2020, and prior to that was group chief risk officer from 2016 to 2020.
Before joining Barclays in 2016, Mr Venkatakrishnan worked at JP Morgan Chase from 1994 in various senior roles across asset management, investment banking and risk.
Mr Staley is married to interior designer Debbie (above, together in New York in October 2013)
Staley owns a yacht, Bequia, named after the Caribbean island where he spent his honeymoon
In his new role, Mr Venkatakrishnan will receive fixed annual pay of £2.7million - delivered 50 per cent in cash, paid monthly, and 50 per cent delivered in Barclays shares.
The shares will be delivered quarterly and will be subject to a holding period with restrictions lifting over five years.
Mr Venkatakrishnan will also receive a cash payment in lieu of pension of £135,000 per annum, along with medical cover and life assurance.
A Barclays spokesman said today: 'Barclays and Mr Jes Staley, group chief executive, were made aware on Friday evening of the preliminary conclusions from the FCA and the PRA (Prudential Regulation Authority) of their investigation into Mr Staley's characterisation to Barclays of his relationship with the late Mr Jeffrey Epstein and the subsequent description of that relationship in Barclays' response to the FCA.
'In view of those conclusions, and Mr Staley's intention to contest them, the Board and Mr Staley have agreed that he will step down from his role as Group Chief Executive and as a director of Barclays.
'It should be noted that the investigation makes no findings that Mr Staley saw, or was aware of, any of Mr Epstein's alleged crimes, which was the central question underpinning Barclays' support for Mr Staley following the arrest of Mr Epstein in the summer of 2019.
'The board is disappointed at this outcome. Mr Staley has run the Barclays Group successfully since December 2015 with real commitment and skill.
'Supported by the senior team which he largely helped build and on whom the Barclays Group will be relying for the future, Mr Staley clarified the Barclays Group's strategy, transformed its operations and materially improved its results.'
A wealthy financier, Epstein was found dead in a New York prison in August 2019 while awaiting trial on allegations that he trafficked girls as young as 14 for sex.
Mr Staley was replaced by head of global markets CS Venkatakrishnan, known as 'Venkat'
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said today: 'The repercussions from the Jeffrey Epstein scandal stretch far and wide, and now Barclays finds itself at the centre of the storm.
'For the chief executive, Jes Staley to step down following an investigation by city regulators into his into his dealings with Epstein, it's clear the conclusions of the probe are critical.
'While the probe did not centre on Mr Staley's role at Barclays but what he disclosed about his previous position at JP Morgan, what was under question was how he characterised his former relationship with the disgraced financier.
She added: 'Sudden change at the top is always unsettling, and the departure of Mr Staley who propelled its successful investment banking expansion strategy may be particularly unnerving for investors, with shares falling 3 per cent in early trading.
'However, continuity will be provided to some extent by CS Venkatakrishnan, head of global markets, who will take over as chief executive.'
An FCA and PRA spokesperson said: 'The FCA and PRA do not comment on ongoing investigations or regulatory proceedings beyond confirming the regulatory actions as detailed in the firm’s announcement.'
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